The Molson Coors Beverage Co. has announced plans to cease production at its Irwindale brewery by September, but the facility could re-emerge under new ownership.
The brewery — which opened in 1980 and employs about 470 workers — is a well-known landmark for motorists traveling the 210 freeway. In a statement issued Monday, Jan. 6, the Denver-based company said it has entered into an agreement with Pabst Brewing Co. which gives that company an option to purchase the plant for $150 million.
Molson Coors said it will work with its employees and with union representatives to provide the resources needed for transition.
“We recognize this decision creates uncertainty for our employees in Irwindale and we will support them throughout the transition,” Chief Integrated Supply Chain Officer Brian Erhardt said in a message to distributor owner-principals, operating managers, other senior executives and communications contacts. “Although this decision was difficult, we are making it in the best long-term interest of the company.”
Last year, the Irwindale brewery produced 4.8 million barrels of beer which were shipped to 261 independently-owned distributors. During its 40 years of operation the facility has produced a variety of beers, including Miller Lite, Coors Light, Miller High Life, MGD, Steel Reserve, Miller 64 and several brands for Pabst.
Over the next nine months, products currently produced in Irwindale will be transitioned to other breweries, primarily in Golden, Colo., and Fort Worth, Texas, the company said.
“This move will allow us to optimize our brewery footprint while streamlining our operations for greater efficiency across the network,” Erhardt said in a statement. “While it was a very difficult decision, we have extra capacity in our system and Irwindale’s production can be absorbed by other breweries in our network.”
Monday’s announcement comes on the heels of a plan recently announced by Molson Coors to revitalize and restructure the business. That includes moving corporate support jobs to Milwaukee this year. Ceasing production at the Irwindale facility is not part of the larger revitalization plan announced in October and it does not impact previously announced cost savings guidance, the company said.
Molson Coors Beverage Co., previously known as Molson Coors Brewing Co., said it plans to invest several hundred million dollars to modernize the Golden brewery in order to streamline its delivery process.
The brewer also estimated a reduction of 400 to 500 employees in its U.S., Canada, international and corporate segments.
Industry publication Brewbound said Pabst will have 120 days after receiving notice of the Irwindale closure to exercise its option to buy the brewery, according to a U.S. SEC filing.
As part of the agreement between Molson Coors and Pabst, both companies have “executed mutual release of claims related to their ongoing litigation and dismissed the litigation with prejudice,” referencing Pabst’s lawsuit against the former MillerCoors over a nearly two-decades-old contract brewing arrangement. The two parties announced a settlement in that case in November 2018, Brewbound said.
In a statement, Pabst Brewing chairman and CEO Eugene Kashper said the company is “pleased to have finalized our settlement with MillerCoors.”
“We will work with our new long-term supply chain partner, City Brewing Co., to evaluate this opportunity and are committed to choosing a path forward that is in the best interest of all our stakeholders,” he said.